CATALIST-LISTED OUE Lippo Healthcare $ OUE Lippo HC: 5WA +2.86% (OUELH) on Tuesday reported a net loss of S$2.5 million for the second half of the year ended December, versus a net loss of S$97.5 million in the corresponding year-ago period.

 

This translated to a loss per share of S$0.00056, versus a loss per share of S$0.02194 in H2 2020.

 

No dividend was declared for the period under review, unchanged from the previous year.

 

The company' s full-year earnings came in at S$111.4 million, reversing from a loss of S$98.7 million in the previous year.

 

Revenue for H2 inched down 1 per cent to S$10 million from S$10.1 million in the year-ago period. Cost of sales for the period was up 21 per cent to S$2.9 million from S$2.4 million.

 

For the full-year, revenue was down 2 per cent to S$19.7 million from S$20 million. OUELH' s topline, which mainly comprised rental income from its 12 nursing homes in Japan, revenue from its pharmaceutical distribution business and the Wuxi Lippo Xi Nan hospital in China, was down marginally due to the weaker exchange rate of Japanese yen to Singapore dollar.

 

Cost of sales for the year was up 6 per cent to S$5.1 million, due primarily to higher cost of sales incurred by Wuxi Lippo Xi Nan hospital as a result of ramping up its sales during the year from adapting its its services to the on-going Covid-19 pandemic.

 

The group, however, booked a 16 per cent decrease for the full year in administrative expenses due to stringent cost management and lower costs incurred in relation to corporate, merger and acquisition activities.

 

As at end-December, OUELH' s net current liabilities amounted to S$21.1 million due to a shareholder' s loan totalling $4.15 million that was accounted for as current liabilities, as well as provisions of S$22.5 million.

 

The board of directors, however, confirmed that the company is able to meet its debt obligations as and when they fall due in view of the continuing efforts by management to improve the financial position of the group.

 

In its outlook statement, OUELH said the Covid-19 pandemic continues to present challenges and uncertainties for the global economy, particularly with the recent emergence of the Omicron variant.

 

However, the company said more countries are adopting a " co-exist" approach towards the virus as global vaccination rates increase.

 

" While we are hopeful that the global economy will eventually recover, we remain cautious and will continue to monitor the global pandemic situation."

THE former group chief executive officer of International Healthway Corp (now known as OUE Lippo Healthcare), Fan Kow Hin, has been charged for failing to submit his statement of affairs to the trustees of his bankruptcy estate.

 

Fan, a bankrupt since March 2017, was required to file his statement of affairs that would disclose his assets and liabilities by Dec 24 last year, a deadline extended by the trustees of his bankruptcy estate.

 

However, he allegedly failed to comply with the requirement and now faces a charge under the Bankruptcy Act for which he is liable to a maximum fine of S$10,000, an imprisonment term not exceeding two years or both.

 

According to the law, a bankrupt must submit the statement of affairs within 21 days from the date of the bankruptcy order, as well as provide documents to support his declaration of assets, income and expenses.

 

Fan' s case will be mentioned in court on Oct 11.

 

The 65-year-old applied in 2017 to make himself a bankrupt on grounds of business failure.

 

The trustees of Fan' s bankruptcy estate have taken out a lawsuit against One Organisation and two others to seek the avoidance of transactions allegedly at an undervalue and unfair preferences in a bid to claw back claims. Judgment for the lawsuit is pending.

 

Fan was previously the group CEO and a co-founder of the Catalist-listed International Healthway Corp from May 2015 to January 2016, and the executive chairman of Healthway Medical Corp prior to that.

 

CATALIST-LISTED OUE Lippo Healthcare $ OUE Lippo HC: 5WA -4.76% (OUELH) posted a net profit of S$113.8 million for the six months ended June, boosted by a one-off S$110 million gain from a shareholder loan conversion.

 

Excluding the gain, the company posted a S$3.67 million net profit for the period, reversing the year-ago loss of S$1.26 million.

 

OUELH' s revenue dipped 2 per cent year-on-year to S$9.67 million, mainly due to the weaker exchange rate of Japanese yen to Singapore dollar. Its revenue comprises rental income from 12 nursing homes in Japan, as well as earnings from pharmaceutical distribution and the Wuxi Lippo Xi Nan hospital in China.

 

The weaker exchange rate also contributed to a 10 per cent fall in OUELH' s cost of sales for the half-year. Another reason for this was lower sales from the pharmaceutical distribution business, which was affected by delays in customers' orders.

 

Looking ahead, OUELH is closely monitoring the Covid-19 situation in China, given new Delta variant cases in the country. The construction of China Merchants - Lippo Obstetrics & Gynaecology Changshu Hospital and China Merchants - Lippo General Hospital Prince Bay Hospital are ongoing as planned. The hospitals are expected to commission in 2023 and 2024 respectively.

 

It is also remaining cautious in Japan. " Given that Japan is still in the midst of the latest Covid-19 wave, we will continue to monitor the situation closely," the company said.

 

Meanwhile, OUELH' s joint venture hospitals in Myanmar also continue to operate despite the political instability. The Pun Hlaing Hospital Hlaing Tharyar in Yangon has been designated as one of the few private hospitals to test and treat Covid-19 patients. The Myanmar operations are not expected to impact OUELH' s results for this financial year.

OUE Lippo Healthcare (OUELH) said on Wednesday that its flagship hospital in Yangon has temporarily closed its emergency department amid a recent spike in Covid-19 infections in Myanmar.

 

In an exchange filing, OUELH said the Hlaing Tharyar Hospital had announced last Thursday that the emergency department would be temporarily closed due to " a shortage of manpower, oxygen and medical supplies" . It noted that the hospital' s other departments were still functioning.

 

The group jointly operates and manages three hospitals, three clinics and a medical centre in Myanmar through a joint-venture partner, First Myanmar Investment Public Company Limited.

 

OUELH said: " Hlaing Tharyar Hospital is expected to resume the operations of its emergency department once it is able to stabilise its oxygen and medical supplies and manpower needs to continue to provide quality care for all its patients."

 

The company said the temporary closure of the emergency department is currently not expected to have any material impact on the group' s financial performance for the current financial year ending in December.

 

However, it added that, given the " rapidly evolving situation of the Covid-19 pandemic and the supply-chain disruption for oxygen and medical supplies in Myanmar" , it is difficult to determine at the moment how long the temporary shutdown would last, or whether it would need to be extended in duration or scope - including to other departments or hospitals.

 

OUELH said: " It is therefore not currently possible to ascertain the financial impact on the group if an extension of the temporary closure of emergency department in any form is required."

 

Reuters, citing state media figures, reported that Myanmar registered a record 281 Covid-19 deaths on Monday, and 5,189 new infections. However it noted that medics and funeral services have said that the real toll is much higher than the military government' s figures.

OUE Lippo Healthcare has entered into certain interested person transactions (IPT) during the current financial year with the manager of First Reit and with OUE Treasury, it said in a filing to the Singapore Exchange on Friday night.

 

First Reit' s manager is a joint venture between the company and OUE, while OUE Treasury is a wholly-owned unit of OUE, which in turn is a controlling shareholder of OUE Lippo Healthcare.

 

In January, First Reit had launched a non-underwritten rights issue to raise gross proceeds of about S$158.2 million while First Reit' s manager had subscribed for its pro rata entitlement of the rights issue. On Feb 11, 2021, OUE Lippo Healthcare granted an interest-free loan of about S$5.92 million to First Reit' s manager in order for it to subscribe for its total provisional allotment of units under the rights issue.

 

" The value at risk to the company for the First Reit manager' s loan for the financial year ending Dec, 31 2021 is the value of the loan (of around S$5.92 million)," said OUE Lippo Healthcare.

 

Meanwhile, on Aug 14, 2019, a subsidiary of the company, OUELH Medical Assets (OMA), entered into a loan agreement with OUE Treasury where OUE Treasury advanced S$4.15 million to OMA at an interest rate of 4 per cent per annum.

 

On Jan 22, 2021 and June 25, 2021, OUE Treasury and OMA entered into extension letters, where the term of the OUE Treasury loan was extended to June 29, 2021 and Dec 29, 2021.

 

The value at risk to OMA for the OUE Treasury loan extensions for FY2021 is the interest payable on the loan in FY2021 - or S$165,000, the company said.

 

The total value of all transactions entered into between the group and the interested group for FY2021 is nearly S$195.7 million, which represents 141.6 per cent of the group' s latest audited net tangible assets (NTA) as at Dec, 31 2020.

 

This includes another transaction on Feb 23, 2021 for the allotment and issuance of convertible perpetual bonds to Treasure International Holdings following the conversation of existing shareholder loans. The value for that transaction was about S$189.6 million.

 

As it exceeds the relevant threshold of 3 per cent of the group' s audited NTA under the Catalist rules, an announcement was required by OUE Lippo Healthcare.

 

The company' s audit and risk committee has reviewed the First Reit manager loan and OUE Treasury loan extensions and is of the view that they are not prejudicial to the interests of the company and its minority shareholders, OUE Lippo Healthcare said.